This sort of thing mostly works fine for students and similar. (And internships are often great for everyone concerned.) But this doesn't really work for someone who already is working full-time. Some pay is fine but there's no way I'm taking a week of vacation to interview with you.

At our place we reserve coding tests for applicants on the more junior end of the spectrum. I've always found conversational interviews sufficient for vetting mid to senior level developers.

We do pay a good rate for the time we instruct people to spend on the coding test. We value our people and prefer starting the relationship generously and in good faith.

Also keep in mind that many tech companies have anti-moonlighting clauses or otherwise forbid side projects. You’re losing current employees from these companies from the interview funnel.

I'm sure a lot of folks take the attitude that it only matters if you get caught. However, unless perhaps I already had one foot out the door, I'd be very hesitant to flagrantly violate an employment agreement forbidding such things to accept a relatively modest payment for some outside work.

I understand it, I wasn't a student, but I didn't have a job at that point (I quit 2 years before to travel the world and had some contracting jobs).

The good part is that it was the last step, and 50% of the people from the last step were given an offer, so it wasn't that bad (though I'm afraid that the offer itself was maybe too low compared to my previous works).